I have been warning on this blog that U.S. failure to comply with the latest WTO ruling against the antidumping calculation technique known as zeroing could open a Pandora’s box that could undermine and eventually destroy the rules-based trading system. Well, in the words of the old Gilda Radner character from SNL, Emily Litella, “Nevermind!”
The U.S. mission in Geneva announced yesterday that, despite its view that the Appellate Body’s decision was intrusive and wrongheaded, the United States intends to comply. That is very good news, for at least two reasons.
First, zeroing severely and unjustly inflates antidumping duty assessments and collections, creating bigger trade barriers. Depriving the Commerce Department of that methodological trick will undoubtedly lead to lower dumping margins overall.
Second, it is important that the United States show some respect for the outcomes of dispute settlement. Berating and disregarding those outcomes only serves to erode support for the system. And if the United States expects to get some mileage as a complainant out of its likely string of cases before the WTO (a subsidy case against China was filed two weeks ago, and the Democratic congress is at least rhetorically fixated on enforcement, enforcement, enforcement), it should show some deference to the rules.
Compliance with the zeroing ruling will likely take at least one year (and probably more), so it’s not entirely out of the question that sentiments could change in Congress or the administration before then.